AI Predicted to Contribute $1 Trillion to India's GDP by 2035, AI Funding Reaches $1.3 Billion: OpenAI-Z47 Report

India's AI Edge: Unlocking $1 Trillion in GDP Growth by 2035

A joint report released by OpenAI and venture capital firm Z47 has projected that artificial intelligence-led productivity gains can add $1 trillion to India's GDP by 2035, helping the country move closer to its $8.3 trillion Viksit Bharat target. According to the report, titled The India AI Edge, AI could add 1-1.5 percentage points to India's annual GDP growth.

India has emerged as the world's second-largest AI market, with over 100 million weekly ChatGPT users. The country also ranks among the top five globally on AI "thinking capability," measured through reasoning usage by advanced users. However, despite this scale, fewer than 10% of Indians currently use AI, pointing to significant room for growth in adoption. The report noted that India's top 10 cities account for nearly 50% of AI activity, despite making up less than 10% of the population.

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Bengaluru and Hyderabad lead in builder activity, while Delhi NCR has the highest ChatGPT penetration. The report also highlighted strong momentum in India's AI startup ecosystem, with AI funding nearly doubling year-on-year from over $600 million to around $1.3 billion. Investors are increasingly backing vertical AI startups in sectors such as healthcare, fintech, and legal services.

Enterprises are moving from pilots to deployment, with 95% of Indian CXOs surveyed saying AI has already been embedded into enterprise workflows. Nearly half of the companies surveyed were categorized as "mature adopters," meaning AI has moved beyond pilot projects into core operations. The report found that around 68% of mature adopters spend more than 10% of their software budgets on AI, compared with most early adopters who still spend below that threshold.

Engineering, customer support, and marketing have emerged as the strongest AI adoption areas across enterprises. Mature organizations are increasingly deploying AI in DevOps, infrastructure management, and incident resolution workflows. The report also noted that AI has not significantly reduced engineering hiring but has raised expectations for technical talent. Product managers, designers, and analysts are increasingly using AI coding tools to build prototypes and workflows.

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India's AI user base is among the youngest globally, with nearly half of ChatGPT users belonging to Gen Z. The report said Indian users over-index on work-focused AI use cases such as coding, education, and data analysis compared with global averages. The report also highlighted India's sovereign AI push through the IndiaAI Mission, which includes subsidized GPU access, AI datasets, startup financing, and support for local-language AI development.